Biden Changes PPP Loan Rules to Benefit the Smallest Small Businesses

President Joe Biden announced Monday that he’s putting in place new rules for the PPP loan program that gives exclusive access to it to Main Street mom-and-pop businesses.

These smallest of small businesses, he said, haven’t gotten a fair shake at aid programs designed to help keep companies from going out of business during the pandemic.

“Small businesses are getting crushed,” Biden said. “Since the beginning of this pandemic, 400,000 small businesses have closed. Millions more are hanging by a thread.”

Smallest Small Businesses Getting Exclusive Access to PPP Funds for 2 Weeks

The President said that starting Wednesday, Feb. 24, the US Small Business Administration will create a 14-day window exclusively for businesses and non-profit organizations with less than 20 employees to apply for PPP loans.

Those owners can find out how to get loans during this 2-week window at the SBA website.

Biden also says the SBA will “remove barriers” that prevented small businesses from applying for PPP loans so far. Those barriers include:

• Student loan default: If a business owner or part-owner has gotten behind on paying a federal student loan due to COVID-19 hardships, that business can now apply.
• Criminal record: If a business owner or part owner has a prior criminal record which is unrelated to fraud, the business owner can apply.
• Non-citizen, lawful residents of the US: These small business owners can use the Individual Taxpayer Identification Number (ITIN) to apply.

The President added that one-person businesses, or sole proprietors, will have access to PPP loans during this 2-week window as well.

“When the Paycheck Protection Program was passed, a lot of these mom-and-pop businesses got muscled out of the way by bigger companies who jumped in front of the line,” the President said.

These companies will still have access to PPP funds after the 2-week window expires but the program ends on March 31.

Sen. Ben Cardin (D-Maryland), chair of the Senate Small Business Committee, applauded the President’s new temporary rules for getting PPP loans.

“I have pushed for many provisions to prioritize underserved and underbanked businesses in all the COVID-19 relief, and I applaud the Administration for taking swift action to build on our work and ensure that our most vulnerable small businesses get the help they need during the pandemic,” he said in a statement Monday.

House Small Business Committee Chairwoman Nydia Velazquez says this 2-week window will help businesses owned by persons of color.

She said in a statement, “By increasing access to PPP for firms with fewer than 20 employees, the administration will extend access to more underserved businesses and firms owned by people of color.”

Biden’s American Rescue Plan Needs Congressional Approval

Biden made this announcement as part of his American Rescue Plan to help businesses affected by the COVID-19 pandemic. While those temporary changes in the PPP loan fund will go into effect on Wednesday, the President will need Congressional approval for the rest of the aid he proposes to small businesses.

He indirectly addressed Congress in a speech Monday saying they needed to pass his Rescue Plan to get money to “navigators” at the local level to help small business owners get through the pandemic. He wants $175 million for that effort.

You can watch Biden’s full speech from Monday here:

ALSO READ:

• $341 Million in PPP Fraud So Far, and Counting
• Second Round of PPP Loans Now Available
• EIDL Loan Programs Open to Eligible Small Businesses

Image: White House/Youtube

This article, “Biden Changes PPP Loan Rules to Benefit the Smallest Small Businesses” was first published on Small Business Trends